Two judges side with Meridian on Davis Refinery complaints

Meridian Energy Group attorney Mark Vyvyan, middle, makes his argument during a hearing at the Burleigh County Courthouse on Tuesday in Bismarck before South Central District Court Judge Bruce Haskell involving the construction of Davis Refinery in Billings County. Seated next to Vyvyan is attorney Lawrence Bender and on the left is Dakota Resource Council attorney JJ England. MIKE MCCLEARY, TRIBUNE
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The site of the Davis Refinery, southwest of Belfield, was posted with a sign as shown on July 31. TOM STROMME, TRIBUNE
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AMY DALRYMPLE
Bismarck Tribune

Sep 11, 2018

Two judges sided with Meridian Energy this week on legal challenges related to the Davis Refinery being built near Theodore Roosevelt National Park.

The environmental group alleged the conditional use permit granted in July 2016 is no longer valid because the company did not construct or begin operating the refinery within a year. The complaint cites Billings County zoning ordinances that require a conditional use to be instituted within a year of the permit’s approval.

Meridian attorneys argued the county’s intent was for the one-year timeframe to begin after Meridian received a permit to construct from the North Dakota Department of Health Division of Air Quality, which was granted in June 2018.

Haskell ruled after hearing arguments from both sides on Tuesday that Meridian made the more persuasive argument, finding that the conditional use permit is valid. Haskell said deference to the county commission factored into his decision.

However, Haskell also said during the hearing that he’s concerned about substantial changes that Meridian made to the Davis Refinery plans after receiving the conditional use permit.

“Under your theory, you could build a 40-story skyscraper out there because you’ve got the permit,” Haskell told attorneys for the company.

Meridian Attorney Mark Vyvyan responded by saying, “I’m not sure I’d go that far,” and pointed to an affidavit from Billings County Commission Chairman Jim Arthaud that indicated the county has been updated about changes to the refinery.

“The county does not feel that those affect the validity of the permit,” Vyvyan said.

Haskell also said the county’s zoning ordinance should be rewritten because the wording is open to interpretation.

“It’s just amazing to me that in a project of this magnitude that the CUP was issued with just an oral motion under a zoning statute or ordinance that is really pretty ambiguous,” Haskell said.

The judge's ruling dismisses the Dakota Resource Council claim. Attorney JJ England said the group is disappointed with the ruling and evaluating its options.

“Our plan all along is to ensure that the refinery is constructed legally and in accordance with the law," England said after the hearing.

PSC complaint

Meanwhile, an administrative law judge recommended Monday that a complaint that seeks to halt construction of the Davis Refinery until it receives a Public Service Commission permit should be dismissed.

Patrick Ward with the Office of Administrative Hearings reviewed a complaint from the Dakota Resource Council and the Environmental Law & Policy Center that argues Meridian Energy is trying to circumvent state law by not applying for a Public Service Commission permit.

Ward concluded that the PSC does not have jurisdiction over the refinery because it will process 49,500 barrels of oil per day, 500 barrels below the threshold that triggers a PSC review.

The environmental groups accused Meridian of attempting a “bait and switch,” or building a smaller refinery without a PSC review with plans to later seek regulators’ approval to expand after it is already constructed. The groups point to previous statements by Meridian about plans to build a refinery to process 55,000 barrels of oil per day.

Meridian argued the complaint from the environmental groups should be dismissed because the company now plans to construct a refinery to process 49,500 barrels of oil per day.

Ward wrote that the PSC does not have the authority to speculate about the company’s plans for the future. He also wrote, if Meridian does plan to expand, the PSC would then acquire jurisdiction over the facility.

Ward recommends that the complaint from the environmental groups be dismissed, along with other motions including a request for a cease-and-desist order.

The three-member Public Service Commission asked Ward to provide a recommendation, but, ultimately, the commission will make the final decision.

Opponents of the refinery, which is about 3 miles from Theodore Roosevelt National Park, have argued that the facility should have a comprehensive review. Preliminary site construction began in July.

An appeal is still pending related to the health department’s air quality permit for the refinery. In addition, a hearing with an administrative law judge is scheduled for Nov. 8 related to a State Water Commission permit for the facility.